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Smith v. Yeager

United States District Court, District of Columbia

January 13, 2017

MARTIN J.A. YEAGER, et al., Defendants.


          REGGIE B. WALTON United States District Judge.

         The plaintiffs, Barbara Smith and Clarence A. D. Gasby, initiated this action against the defendants, Martin J. A. Yeager, Land, Carroll & Blair, P.C. (“Land Carroll”), where Yeager was a principal and agent, Gregory T. Dumont, and Mid-Atlantic Commercial Law Group, LLC (“Mid-Atlantic”), where Dumont was a principal and agent, asserting a legal malpractice claim regarding the defendants' representation of the plaintiffs “in a landlord-tenant matter, ” (the “L and T matter”) “in the Superior Court of the District of Columbia, ” (the “Superior Court”). Complaint and Demand for Jury Trial (“Compl.”) ¶¶ 1, 8-9, 14, ECF No. 1-3. Specifically, the plaintiffs allege that the defendants breached their “duty to use [the] degree of care reasonably expected of other legal professionals with similar skills acting under the same or similar circumstances” while representing them in the L and T matter in Superior Court. Id. ¶ 38. Currently before the Court is the defendants' Motion to Transfer Venue Under 28 U.S.C. § 1404 (“Defs.' Mot.”), which seeks to transfer this action to the United States District Court for the Eastern District of Virginia. Upon careful consideration of the parties' submissions, the Court concludes for the following reasons that it must deny the defendants' motion.[1]

         I. BACKGROUND

         “On February 7, 1994, the landlord for Union Station, Union Station Venture, Ltd. [(“Union Station Venture”), ] entered into a lease agreement [(“Lease”)] with La Femme Noire D.C., Incorporated [(“La Femme Noire”)], a District of Columbia corporation” and subsidiary of Ark Restaurants Corporation (“Ark Restaurants”). Compl. ¶ 16. Smith, a former employee of Ark Restaurants, “signed the lease in her official capacity as an officer of [La Femme Noire].” Id. Four years later, La Femme Noire, as part of a “deal [that] was structured as an asset sale, ” assigned its lease agreement with Union Station Venture to Finally Free, Inc. (“Finally Free”), “a Delaware corporation formed by the [p]laintiffs.” Id. ¶ 17. “In or about 2007, [Union Station Venture] sold its interest in Union Station to Union Station Investco, LLC [(“Union Station Investco”)].” Id. ¶ 18. “Thereafter, [Finally Free] fell behind in the payment of the rent [and], on or about January 25, 2013, [Union Station Investco] filed the [L and T] matter” solely against La Femme Noire, “seeking possession of the premises on the grounds of the unpaid rent.” Id.

         On or about February 12, 2013, La Femme Noire “retained [the defendants] to provide [it] legal services” in the L and T matter. Defs.' P. & A. at 2. La Femme Noire entered into a Representation Agreement (the “Agreement”) with Land Carroll, which outlined the terms and conditions governing the legal services that would be provided in the L and T matter. See generally Defs.' Exhibit (“Ex.”) C (Representation Agreement (“Agreement”)). On March 21, 2013, “[u]pon information and belief [that] La Femme [Noire] ha[d] never been properly incorporated in D.C.[, ] or [in] any other jurisdiction, ” United Station Investco “moved to amend its complaint to add [ ] Smith and [ ] Gasby to the [L and T] matter as individual [d]efendants.” Compl. ¶ 20. “On April 10, 2013, in open court, ” the defendants provided “the assignment documents purporting to show that the Lease was assigned to [Finally Free] ¶ 1998, but did not demonstrate that [La Femme Noire] existed at the time the [L]ease was signed or assigned.” Id. ¶ 24. Consequently, Smith and Gasby “were added as defendants to the [L and T matter].” Id. The parties dispute whether Smith and Gasby became a party to the Agreement after being named as individual defendants in the L and T matter. See Counterclaim (Mar. 29, 2016) (“Countercl.”) ¶ 12, ECF No. 6 (asserting that “Gasby[] orally requested that [Land Caroll] represent” the plaintiffs “pursuant to the terms of the [ ] Agreement”); see also Pls.' Opp'n at 5 (denying that such an oral agreement modifying the Agreement was ever made).

         During the L and T pre-trial and trial proceedings, the defendants did “not provide any proof that [La Femme Noire] existed at any point” and “conceded that the corporation never existed.” Compl. ¶ 25; see also id. ¶¶ 21-30. The L and T matter “resulted in a judgment being entered personally against [the p]laintiffs . . . on September 19, 2013, ” id. ¶ 14, and according to the plaintiffs, “[t]he sole basis to hold . . . Smith and Gasby liable was the mistaken belief and concession by the [d]efendants that [La Femme Noire] never existed as an entity and at all times was just a name, ” id. ¶ 30. Thereafter, “Smith and Gasby retained new counsel to assist them with managing various issues, ” who were able to “confirm[] that [La Femme Noire's] Articles of Incorporation had been filed” and therefore was a valid existing entity. Id. ¶ 32. Smith and Gasby then filed “a Rule 60 motion to vacate the judgment” in the L and T matter, id. ¶ 33, for the purpose of demonstrating “that [La Femme Noire] in fact existed at all relevant times, ” id. ¶ 34, and that they “were never in possession [of the premises] in their personal capacities and therefore there was no subject matter jurisdiction as against them in the Landlord & Tenant Branch, ” id. ¶ 33. However, that motion was denied. See id. ¶ 34.

         On January 22, 2016, Smith and Gasby initiated this legal malpractice action against the defendants in Superior Court. See Compl. The defendants then removed the plaintiffs' case to this District pursuant to 28 U.S.C. §1441(a). See Notice of Removal ¶ 5, ECF No. 1. After the case was removed to this Court, the defendants responded to the plaintiffs' Complaint and filed a counterclaim for breach of contract based on the plaintiffs' failure to adhere to the terms of the Agreement. See Countercl. at 1. The defendants now move to transfer this case to the Eastern District of Virginia. See generally Defs.' Mot.


         28 U.S.C. § 1404(a) provides that, “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” 28 U.S.C. § 1404(a) (2012). The decision to transfer a case is discretionary, and a district court must conduct “an individualized, ‘factually analytical, case-by-case determination of convenience and fairness.'” New Hope Power Co. v. U.S. Army Corps of Eng'rs, 724 F.Supp.2d 90, 94 (D.D.C. 2010) (quoting SEC v. Savoy Indus. Inc., 587 F.2d 1149, 1154 (D.C. Cir. 1978)). And the moving party “bears the burden of establishing that the transfer of th[e] action is proper.” Greater Yellowstone Coal. v. Bosworth, 180 F.Supp.2d 124, 127 (D.D.C. 2001) (citation omitted).

         As a threshold matter, a district court must determine that the proposed transferee court is located “in a district where the action might have been brought.” Fed. Housing Fin. Agency v. First Tenn. Bank Nat'l Ass'n, 856 F.Supp.2d 186, 190 (D.D.C. 2012) (Walton, J.) (quoting Montgomery v. STG Intern., Inc., 532 F.Supp.2d 29, 32 (D.D.C. 2008)). If so, then a district court

considers both the private interests of the parties and the public interests of the courts[.] The private interest considerations include: (1) the plaintiffs' choice of forum, unless the balance of convenience is strongly in favor of the defendants; (2) the defendants' choice of forum; (3) whether the claim arose elsewhere; (4) the convenience of the parties; (5) the convenience of the witnesses . . ., but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and (6) the ease of access to sources of proof. The public interest considerations include: (1) the transferee[] [court's] familiarity with the governing laws; (2) the relative congestion of the calendars of the potential transferee and transferor courts; and (3) the local interest in deciding local controversies at home.

Shapiro, Lifschitz & Schram, P.C. v. Hazard, 24 F.Supp.2d 66, 71 (D.D.C. 1998) (citation omitted).

         III. ANALYSIS

         There is no dispute that this case could have been brought in the Eastern District of Virginia, as the plaintiffs are residents of New York and all of the defendants reside in Virginia, Compl. ¶¶ 2-7, where the proposed transferee court, the Eastern District of Virginia, is located, see 28 U.S.C. § 1391(b)(1) (“A civil action may be brought in . . . a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located.”).[2]Accordingly, the issues for the Court to assess are therefore: (1) whether the defendants are estopped from seeking a venue change after filing a counterclaim in this district; if not, (2) whether the forum-selection clause in the Agreement requires this case to be transferred to the Eastern District of Virginia; and if ...

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